Marchese Health Care was going through tough financial times and had just finished laying off dozens of employees one month before it started supplying the chemotherapy drugs that are now the subject of a provincial probe.

The Hamilton-based company had provided medical supplies and pharmaceutical services to the Hamilton Niagara Haldimand Brant Community Care Access Centre since the local health agency was created in 2007, but lost the contract to Calea Ltd. in September 2011. Internal human resources memos, available on the company’s website through an online search, refer to it as a “time of uncertainty” and a “difficult time” and direct employees to resources for searching for jobs and coping with stress.

By January of 2012, the memos available online had listed the names of 57 employees who had resigned or been laid off. In February and March of that year, Marchese started supplying pre-mixed intravenous bags of the chemotherapy drugs cyclophosphamide and gemcitabine to four Ontario hospitals, including the Windsor Regional, and one New Brunswick hospital.

Last week, the hospitals announced they had discovered those bags had been overfilled with saline, which meant about 1,200 patients had received chemotherapy treatments that were weaker than they were supposed to be over the course of their treatments. At Windsor Regional, the situation lasted for more than a year. The province is investigating and hospitals are meeting with patients, but so far no one knows whether the diluted drugs affected the patients’ chance of survival.

Greg Wilkinson, a spokesman for Marchese, declined an interview request on behalf of the company’s president and CEO Marita Zaffiro. He said the company will not make any further comments or discuss Marchese’s financial difficulties and resulting layoffs in the months before it started supplying the chemotherapy drugs.

“A government-led review is now underway and we are co-operating fully,” Wilkinson said in a statement on behalf of Marchese. “Given the early stage of the review it is not appropriate to comment further.”

Mary Siegner, a spokeswoman for the Hamilton Niagara Haldimand Brant CCAC, confirmed the organization ended its medical supply contracts with Marchese in December of 2011, but said she was unable to say why the organization chose Calea Ltd. as its new supplier. The CCAC’s medical supply contracts come up for renewal every two years and organizations must get competing bids through a request for proposal process every six years, according to a news release announcing Calea as the winning bidder from 2011.

Siegner said the CCAC’s decision to end its contract with Marchese was not related to any concerns or complaints. “There were no red flags related to our HNHB CCAC contract with Marchese,” she said.

The loss of the contract would have been a blow to Marchese, a respected fixture in the Hamilton community. The company was celebrating its 50th anniversary that year, with the company growing from a small community pharmacy to a province-wide drug supplier.

Owner and president Marita Zaffiro bought the original community pharmacy from Jack Marchese, a family friend, in 1988. Twenty years later, Zaffiro had grown the business to 80 employees, seven storefronts and a $1-million upgrade to turn a building into a sterile compounding facility to assemble custom prescriptions, intravenous medication and nutrition, according to a 2007 profile in the Hamilton Spectator.

Marchese’s website boasts a long list of awards for both the business itself and its community service. Zaffiro sits on the boards of the non-profit North Hamilton Community Health Centre, the Hamilton Community Health Foundation and the Innovation Factory, a Hamilton organization that supports entrepreneurship

Zaffiro has also sat on the board of directors of Windsor-based health and dental benefits company Green Shield since 1999.

Former employees contacted by the Star spoke well of the company. Matthew Lambie, one of the employees who was laid off after Marchese lost its contract with the Hamilton Niagara Haldimand Brant CCAC, described the company as “very friendly.”

“They were a family company,” he said. “It was a big shock when I read that story.”

Mariam Wanis, another former Marchese employee, also said the news of the watered-down cancer drugs came as a big surprise. “Of course I am shocked,” she said over Facebook, with a link to Zaffiro’s statement saying the hospitals’ use of the drug “was not consistent with the contract, the preparation or its labelling.”

That contract is at the heart of the dispute over what happened and who’s to blame.

The Windsor Regional and the other affected hospitals ended up receiving the cancer drugs from Marchese through MedBuy, which is owned by 28 hospitals and health networks in Ontario, New Brunswick and Prince Edward Island. Medbuy sends out requests for proposals and decides which company will win the contract based on quality and cost, a process Ontario hospitals are required to go through for all medical and non-medical supply purchases.

Windsor Regional Hospital CEO David Musyj said the five affected hospitals are almost certainly the only ones that were using pre-mixed cyclophosphamide or gemcitabine supplied by Marchese, since others would have come forward by now. Other Medbuy members may have had contracts with other suppliers that weren’t up for renewal or mixed the medication in-house, he said.

Musyj said common sense dictates the diluted drugs weren’t prepared according to the contract or accepted standards. He said he’s currently focusing on making sure patients meet with oncologists and have their questions answered, not comparing contract wording to labels.

Windsor Regional decided to contract out the preparation of the intravenous solution to avoid having hazardous chemotherapy chemicals sitting around the hospital, Musyj said. “It was done for a safety issue, which unfortunately is ironic.”

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